Issue 41 – The week of November 21st, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note:

Monday

• No reports of note due out

Tuesday

• CAD retail sales – a key measure of economic activity and sentiment. A high reading is indicative of public appetite to make purchases and is bullish for both the Canadian dollar and precious metals
• US Redbook index – a weighted index of sales of specific items across the US where a weak reading would be detrimental to the US dollar and equities bullish for the precious metals complex
• CAD BOC (Bank of Canada) speech – statement could give clues to the sentiment of the next policy announcement by the bank.
• US weekly crude oil stocks – a measure of energy supplies available a falling supply would be bullish for precious metals

Wednesday

• US S&P PMI – measures the purchase orders of the manufacturing sector. A low reading would be beneficial to precious metals
• US new home sales – a key indicator of overall consumer sentiment. And economic conditions. A low report is bullish for precious metals
• US FOMC minutes – an expanded release of the previous FED announcement explaining the decision they made

Thursday

• No reports of note
• US Thanksgiving

Friday

• US durable goods orders – a measure of the cost of goods that manufacturers pay for goods that are turned into finished products. A key measure of inflationary pressures. A high reading is bullish for the economy and bearish for precious metals.
• US Michigan consumer sentiment report  – measures consumer sentiment to make purchases. A low reading is bearish for the US dollar and bullish for precious metals
• US CFTC gold net positions – an aftermarket reading of all buy and sell futures positions at the end of the week. It shows general market sentiment for expectations of gold prices

Geopolitics

Things in Ukraine are changing at rapid pace. Russian forces continue to suffer battlefield losses and are only able to respond by attacks on energy infrastructure. Winter is now setting in, further exasperating the lack of Russian equipment while Ukrainian forces receive winter kits from western allies which allows them to continue in their reclamation of territory. The exodus of young Russian males abroad is highly underreported. While the Russian government can announce call ups, so many have already left the country, the call ups are futile. The Russians now face the serious prospect of being pushed back to their borders. Not just in Donbas but also Crimea. If this occurs, international supply chain disruptions will be significantly alleviated for grains and metals sourced in eastern Ukraine.

Lockdowns in China remain a constant struggle and detriment to not just their economy but the global supply chain. Manufacturers are beginning to leave China, no longer a stable and viable source of production. From chips to iPhones, product manufacturing is returning to US shores driving further domestic demand for precious metals as the growing electronics sector expands. The US is poised for a renewed moment of tech manufacturing leadership.

The Call

Last week, after a valiant try, gold was unable to close above the key technical level of 1764. It managed to trade above there yet suffered a late-week sell-off — profit-taking after two weeks of solid gains. Fundamental factors remain bullish for the precious metals complex with strong continued central bank purchases, and growing automobile production; both electronic and petroleum based. Any price dips should still be buying opportunities. Lower purchasing points: 1720 and 1700. With a light report schedule, this week looks for geopolitical events to drive markets.

Silver still managed to close above key technical support last week even after a losing week. Silver continues to look like it is leading gold to higher and stronger price levels technically with better chart positioning than its yellow cousin.

Look for a quiet trading week in North America as the US celebrates Thanksgiving on Thursday, markets will be open on Friday in the US, but desks will be skeletally staffed with juniors.

Another key factor that could create thin trading markets for the next month is the World Cup. Much of the world stops when kick-off commences. Oh, and by way Go Canada!!!

Last Week in Review

• Precious metals prices slipped from highs last week as profit-taking occurred
• US Republicans take control of the House of Representatives by the barest of margins. Democrats retain control of Congress.

	Gold	Silver
Open	1763	21.57
High	1786	22.24
Low	1747	20.74
Close	1752	20.99